FAQ

Are Tezos "Mined" like "Proof of Work" Bitcoin?

Tezos are not "mined" like Bitcoin or Ether which relies on "Proof of Work" to crack complex cryptology algorithms to prove that you should be allowed to "mine" a new coin/token. Since Tezos uses "Delegated Proof of Stake" as a method of creating new tokens, the Tezos terms often used are "Baked", "Minted", "Farmed", and sometimes "Forged".​ (although "Minted" is one letter away from "Mined" and "Forged" sounds too much like forgery. So we tend not to use those terms as often.​) "Baker & Baking" is starting to become the standard Tezos terminology.

what is "Proof of Stake"?

​New Tezos are "Baked" using "Proof of Stake" which is much less power intensive, more democratic, and puts the control back in the hands of the actual Tezos owners instead of powerful crypto miners. To create a new Tez, an owner is called on randomly by the Tezos Blockchain. The more Tezos you own, the more likely and more often you will get called on. The "baker" system does do a very small amount of "Proof of Work" crypto calculations to validate the new block but its order of magnitudes less than traditional Proof of Work.

You should have a Delegate who is online 24/7 ready to "bake" new Tezos at a moment's notice whenever the system calls or you risk losing your opportunity to grow your Tezos ownership.

What is The "Proof of stake Bond"?

​If you want to "Bake" new Tezos yourself, you are required to host 8-15% of all the Tezos you are staking as a bond. This bond encourages people to "bake" Tezos ethically. If anyone does something wrong or tries to hack the system and create extra Tezos they run the risk of losing all of their Tezos bond ownership. This helps make the Tezos platform very secure. As your Delegate, we host this bond with our own Tezos that we hold in reserve thereby reducing your risk.

WHY DO I NEED A DELEGATE? Can I do it on my own?

Yes, it is possible to be your own delegate. To "bake" your own Tezos based on your own stake, you would need to set up and host your own server node running both the node and baking software 24/7/365. It is highly advised that this server node have its own dedicated, unlimited internet bandwidth connection. You will also likely be required to own a secure hardware wallet and have it hooked up to the server node system at all times for added security. You will then be required to sponsor a 10% Tezos security bond to assure that you follow the Tezos "baking" rules. This 10% of your Tezos ownership could be lost permanently if baking violations or problems are detected.

If hosting your own server node does not sound like something you are interested in doing, a Delegate such as "CryptoDelegate" is your most profitable alternative. As a delegate, we offer to share our profits (in the form of dividends) in a bid to attract more stakes such as yours. More stakes allow for economies of scale.

Depending on the value of your free time, your personal risk tolerance, the size of your Tezos stake, the cost of your equipment, and your technical expertise, it could be either more or less profitable in the long run for you to stake and bake your own Tezos. Each situation is different depending on node hosting and personal opportunity costs.

We provide delegation as a service because many people simply want an easier professional solution. Alternatively you could choose to do nothing by letting your Tezos sit un-delegated and idle, but then you would be losing out on the opportunity to grow your Tezos ownership.

tell me about voting...

As time goes on, the Tezos platform will need to evolve and the code will need to be updated. Democracy decides how and when this happens. Unlike Proof of Work blockchains such as Bitcoin and Ethereum, where crypto miners have the control, Tezos gives control to the Tezos owners themselves.

Each Tezos Token gets 1 vote. Each group of Tezos is a roll. The more Tezos you own, the more votes you have. You can use these votes to give your opinion on new software upgrades and protocol updates. However, similar to growing your stake, to vote you need to either host your own server node or delegate your authority to someone else. Currently, when you delegate your staking rights you also delegate your voting rights. MyCryptoDelegate is working hard to create a custom solution that allows you to vote independently while still delegating your stake. If you do not want to vote, you can choose to have MyCryptoDelegate vote on your behalf.

What is your relationship to the Tezos foundation?

We are huge Tezos fans! Even though we are not officially connected to the Tezos Foundation, we are very active in the Tezos community and try to align as often as we can with the Tezos Founders and Tezos Foundation.

How Does "crypto delegate" make money?

We bake Tezos and share the profits with you in the form of Rent on your unused Tezos Stake. By choosing us as your Delegate, you effectively decide to not bake Tezos on your own and instead you lease that right to us. We then we pay you Rent/Dividends in the form of newly baked Tezos. You get the vast majority, we keep the rest. (Rent/Divident % yield is dependent on overall Tezos baking output.)

Just like if you owned a piece of land. You may choose to buy equipment and spend time farming that land yourself or you could choose to lease that land to an experienced farmer. That farmer would grow crops on the land then pay you the agreed rent each month. (we use the "farm & farmer" analogy and not "gold mine & miner" analogy because Tezos are not "mined" like Bitcoin or Ether.)

We do not charge any account maintenance fees, time based fees, percent of Tezos minted fees, or delegate voting fees. WE PAY YOU.

I value privacy. Are you Anonymous? What login information will you require?

We understand the need for privacy. We do not ask for any of your personal information, name, age, location...etc. Our login is ANONYMOUS & private and will only require that you use an email to log in. Account validation will happen within the blockchain itself. (Our system will NOT need your PRIVATE key. Please keep your PRIVATE key 100% secure, offline, and secret.)

Can we store your tezos in our hardware wallets?

No, due to government regulations we are unable to store your Tezos in our hardware wallets. Please do not send us your hard earned Tezzies. All Tezos stored in our wallets are either pre-owned and/or generated by CryptoDelegate baking process. Transfer of ownership of user earned Tez happens at the point that the user voluntarily withdraws their earned amount and those Tez arrive in their wallet. Possession signifies ownership.

SECURITY WARNING: Unless you are VERY sure that an online wallet or exchange service has a good reputation and is supported by hardware wallet technology, it is good practice that you store your Tezos in your own personal hardware wallet and take all actions to keep your private keys offline and secure.

Are you an exchange, Bank, or lender?

No, we do not provide any method of buying, selling, brokering, exchanging, trading, loaning, storing, or transferring any currency or tokens from a client to a third party or visa versa.

Do you allow or facilitate Transfers to Third Parties? (open or closed loop?)

No we do not in any way receive funds, store, or facilitate fund transfers from anyone person to a third party. Our system is on a "Closed Loop". This means we do not have any means of receiving tokens from a client and then transferring them to a third party or visa versa. We also do not allow or encourage our clients to send us tokens. We are not in the business of facilitating any third party financial transfers. If you wish to transmit crypto-tokens to a third party, you must send directly from your own personal wallet or use some other means.

How does Tezos foundation describe Proof of Stake and delegation?

2.3 PROOF OF STAKE

​In its initial incarnation, Tezos is launching with a delegated proof-of-stake consensus algorithm. This choice of consensus algorithm is amendable, on-chain, by the stakeholders. In principle, a proof-of-work consensus or even a federated consensus could take its place. However, the development team expects proof-of-stake to be an important part of the Tezos culture and thinks it will remain the primary consensus method.

Tezos’ delegated proof-of-stake system works by letting every stakeholder designate one or several delegates of their choice to create blocks and validate transactions on their behalf. The higher the stake delegated to a given validator, the more often will they be called upon to create blocks. Though the Tezos system is delegated, every token holder can participate as a delegate regardless of the amount they hold.

The network issues newly minted ("baked") tokens as a reward to validators for the service they provide to the network. These rewards will create nominal inflation; holders are free to be their own delegate if they so desire and thus to avoid any dilution. It likely that large delegates will offer to share some of their profits in a bid to attract more stakes.

The computing requirements to become a validator are relatively lightweight (a few hundred watts at most) but a robust, high-speed Internet connection is required. Running a proof-of-stake node also requires more operational security than running a mining operation as it involves signing blocks with a private key on a machine connected to the Internet. This risk can be mitigated by the use of secure hardware components, as found in devices like the Trezor or the Ledger Nano S. -Official Tezos Position Paper

Do the tezos used for bonds also get staked and grow?

Yes, the bond does get included in the roll count which determines your staking and baking power.

Will we offer Delegation services for other Proof of Stake Cryptocurrencies?

Sure, if there is demand for it. We believe that Proof of Stake (as well as Delegated Proof of Stake) is the future of blockchains. As new (D)POS blockchains hit the market we will consider the possibility of providing additional delegation services.

Please Note: CryptoDelegate.com and CryptoDelegate LLC is not a crypto token exchange. We do not provide any method of purchasing, selling, or trading any type of blockchain coins or tokens. We also do not give any financial advice or recommendations. Invest in crypto currencies at your own risk. Our payment system is on a closed loop. This means we do not have any means of receiving or transferring tokens from a client to a third party or visa versa. Payments can only be sent to the original delegator. We do not store crypto tokens on behalf of our customers. Any tokens that we generate and hold in our hardware wallets is property of CryptoDelegate. Token ownership transfer happens immediately upon the Tez tokens being sent and received from CryptoDelegate to the client. If you wish to transmit crypto-tokens to a third party, you must send directly from your personal wallet or use some other method.